Hankook Tire: Sales up 10% in Q3 2017

Increased sales of winter and ultra-high-performance tyres in Europe are credited with helping drive revenue at Hankook Tire up 10.1 per cent year-on-year in the third quarter of 2017.

The tyre maker achieved sales of KRW 1,824.5 billion (£1.2 billion) in the three months to 30 September 2017. The increase in sales is attributed to the abovementioned trend in Europe, as well as a “strong increase” in sales in the ultra-high-performance tyres (UHPT) segment and expended original equipment supply in China. Sales in emerging markets in the ASEAN region, such as Indonesia, also contributed to the increase in sales.

Operating profit, at KRW 214.1 billion (£146.4 million), was 29.2 per cent lower than a year earlier, and the operating margin reduced from 18.3 per cent to 11.7 per cent. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 13.7 per cent year-on-year to KRW 365.6 million (£250.1 million) and the margin contracted from 25.6 per cent to 20.0 per cent. Hankook Tire comments that the cost of raw materials remains higher than a year earlier, while impact from start-up costs at its new plant in the USA resulted in lower than expected margins.

Sales of UHPT products accounted for 35.0 per cent of total sales in the third quarter, up 1.1 per cent year-on-year. In Europe, these tyres accounted for 37.0 per cent of sales during the quarter; this figure is down 0.2 per cent on the 2016 result.

Overall sales in Europe rose 20.4 per cent year-on-year to KRW 637 billion (£436.1 million). Hankook Tire says it experienced replacement market growth in the region, with strong winter sales and increased recognition of its Laufenn tyre brand. The original equipment segment showed “stable” growth.

Further details on Hankook Tire’s Q3 2017 performance can be found in the Tyrepress.com company profiles and reports section.